Delta Loses NRA Tax Battle, Will Likely Win War

What does a memo from the Delta CEO and newly enacted tax reform legislation tell us about the power dynamic between Delta and its home state?

Yesterday, Georgia Governor Nathan Deal singed into a law a $5BN tax reform package. Delta’s fuel tax exemption did not make into the final bill.

Keeping his promise, Lt. Governor Casey Cagle stripped a measure for reduced fuel taxes from the final bill, blaming the move on Delta’s hostile NRA stance.

Simultaneously, Delta released a memo from CEO Ed Bastian concerning the issue. It’s worth a read, so I have included it in full and bolded what I feel are key parts.

This week, you have likely seen Delta in coverage of the national debate over gun control and security in U.S. schools. I want to take the opportunity to update you on how we got here and where we stand.

On Saturday, Delta rescinded a one-time group travel discount for the National Rifle Association’s annual meeting, and asked the organization to remove our name and logo from their website. This decision followed the NRA’s controversial statements after the recent school shootings in Florida. Our discounted travel benefit for NRA members could be seen as Delta implicitly endorsing the NRA. That is not the case.

I have heard from many of you over the last few days. Our people and our customers have a wide range of views on how to increase safety in our schools and public places, and we are not taking sides. Our objective in removing any implied affiliation with the NRA was to remove Delta from this debate.

While Delta’s intent was to remain neutral, some elected officials in Georgia tied our decision to a pending jet fuel tax exemption, threatening to eliminate it unless we reversed course. Our decision was not made for economic gain and our values are not for sale. We are in the process of a review to end group discounts for any group of a politically divisive nature.

None of this changes the fact that our home is Atlanta and we are proud and honored to locate our headquarters here. And we are supporters of the 2nd Amendment, just as we embrace the entire Constitution of the United States.

I have tremendous respect and admiration for Governor Nathan Deal, and thank him for the work he has done on the jet fuel tax exemption. He is a great friend to Delta. I know this action by the state legislature troubled him as it does all of us.

I know it is not comfortable to be caught in a highly emotional debate, and many of you have received questions from customers. We are at our best when we bring our customers and our world closer together. Hopefully, our decisions this week will serve this ultimate cause.

I want to thank every one of you for your professionalism and continued focus on taking care of our customers every day.

I find the memo interesting on many levels. Bastian states, “Our decision was not made for economic gain and our values are not for sale.” I like this line, but in it he concedes that NRA discount was not removed to remain neutral, but to express values. Values are not neutral. This is why Bastian said the decision to remove the NRA discount “followed the NRA’s controversial statements”. Again, that’s not a neutral stance but a values judgment.

I laughed at the “we are supporters of the 2nd Amendment, just as we embrace the entire Constitution of the United States.” What does that even mean? Do you support in the way that majority or minority of the Supreme Court have construed it in Heller?

Delta may have lost the tax cut battle, but it looks like it will win the war.

Brian from The Gatereports that Governor Deal has promised he will get Bastian the promised tax cuts another way.

[E]liminating the jet fuel tax by a different means will happen and it is non-negotiable.

CONCLUSION

Ultimately, Delta will likely receive its lucrative fuel subsidy without backing down from its position on the NRA. Fairly or unfairly, Delta’s stance has raised the ire of many NRA backers, but the Atlanta-based airline and biggest employers in the state of Georgia has positioned itself to have the last laugh.

About Author

Matthew

Matthew is an avid traveler who calls Los Angeles home. Each year he
travels more than 200,000 miles by air and has visited more than 120
countries over the last decade. Working both in the aviation industry
and as a travel consultant, Matthew has been featured in the New York
Times, Chicago Tribune, Wall Street Journal, USA Today, BBC, Fox News,
CNN, ABC, CBS, NBC, Al Jazeera, Toronto Star, and on NPR. Studying
international relations, American government, and later obtaining a
law degree, Matthew has a plethora of knowledge outside the travel
industry that leads to a unique writing perspective. He has served in
the United States Air Force, on Capitol Hill, and in the White House.
His Live and Let's Fly blog shares the latest news in the airline
industry, commentary on frequent flyer programs and promotions, and
detailed reports of his worldwide travel. His writings on
penandpassport.com offer more general musings on life from the eyes of a frequent traveler. He also founded awardexpert.com, a
highly-personalized consulting service that aids clients in the
effective use of their credit card points and frequent flyer miles.
Clients range from retirees seeking to carefully use their nest egg of
points to multinational corporations entrusting Matthew with the
direction and coordination of company travel.

9 Comments

“we are supporters of the 2nd Amendment, just as we embrace the entire Constitution of the United States.”

They mean the 1st amendment. Like it or not the Supreme Court has ruled that corporations have first amendment rights. Georgia has infringed on this because Delta expressed an opinion and was explicitly punished for it.

Funny how states like Georgia are fine with people having the right to refuse service to LGBT people but man the second you mess with the NRA the hammer comes down.

At some point the Northeast and west coasts should just say screw it and join Canada. The rest of the country that produces 35% of the gdp can go on their own.

Religious freedom is not the right to discriminate against other people because of your beliefs. This is some idiotic new spin conservatives are trying out since the rest of the country has pretty much rejected their beliefs.

The entire first part of the second amendment… The part about a well regulated militia. Its convenient how the NRA never mentions that. Go join the national guard and you can have your toys. Heck join the right unit and we’ll even let you have artillery

LOL. The two things that Gilam doesn’t get…
1. Real Religious freedom means you have the right NOT to be forced to condone, celebrate or participate in something your religion forbids you to associate with. A Muslim baker shouldn’t be forced to lend their time and talents to something their religion forbids. But I guess for people like you, that’s called an “idiotic spin”. Good to know.
2. The Founding Fathers knew what they were doing. They specifically mentioned “militia” AND the “people” having the right to bear arms. If they’d just intended the militia to have guns they would have left it there. But I’ll be darned if they didn’t go and add “the people”. And just a 7th grade-level U.S. history student can tell you why it was so critical that private citizens had the right to bear arms and it’s not even arguable. Except by a few shallow, ideological Lefties like you who ignore history of course.
But you do you.

I’d like to know how Deal is going to give DL their tax break if the legislature is opposed to it. He can’t unilaterally change taxes on his own, and the Lt. Gov. (who’s head of the state Senate & is running for governor) isn’t going to do DL any favors.

As for DL’s statement, this isn’t going to do them any good. The damage is done, the narrative is set. Like you, I find their claim to support the 2nd Amendment laughable. If you support it, let’s see some evidence of your support. They’re two-faced & trying to have it both ways.

I read in a separate article that Delta had a grand total of thirteen NRA members that ever used the discount in question. And now that they are losing this tax break of about 50 million dollars, makes me wonder if it was really worth it to them to make a point?

I think pretty much everyone has missed the forest for the trees regarding this ‘controversy.’ The fact is $40 million dollars is not tax relief, nor a tax break for a company like Delta. Considering a 1 cent increase in the price of Jet-A costs Delta $100 million every day, $40 million dollars over a fiscal year is a grain of sand in the Sahara. All of this is meaningless lip service by Georgia’s political leadership, and conservatives are eating it up quicker than it can be served. If Georgia’s Govenor actually stood by his words, he’d find a way to bring real financial pain to Delta. Alas, he’s disingenous.

First the first amendment does not guarantee the right to be free from consequence when speaking your mind. If Delta had been punished for endorsing a white supremacist group I doubt anyone would be complaining about their first amendment rights.

Second what bothers me most is Delta’s ridiculous attempt to claim they are neutral. As Matthew correctly notes their actions and words are anything but neutral. I would have a lot more respect if they simply took a principled stand as opposed to their non-stand stand.

As it is thy have cost themselves a lot of money and became the subject of ire on both sides of the debate. And this is where I differ from Matthew. If you look at what would have happened had Delta said nothing and done nothing vs what has happened I think you have to conclude they would have been better off. Organizations that have kept their NRA ties have not been hurt that I can see so Delta would have gotten their tax break and not angered a substaial portion of their customer base. That’s why I think they have in the end lost and lost big in this one.